Tesco 2009 Annual Report Download - page 119

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117
FINANCIAL STATEMENTS
Tesco PLC Annual Report and Financial Statements 2009
To find out more go to
www.tesco.com/annualreport09
Note 31 Business combinations
The Group has made a number of acquisitions in the year, of which the most significant acquisitions have been disclosed separately and the remainder
shown in aggregate.
The net assets and results of the acquired businesses are included in the consolidated accounts of the Group from the date of acquisition. Acquisition
accounting has been applied and the goodwill arising has been capitalised and is subject to annual impairment testing.
The goodwill acquired in the business combinations listed below has been allocated to the single group of cash-generating units represented by
the acquired businesses, as this is the lowest level within the Group at which the goodwill is monitored internally. Goodwill arising on acquisitions
in the year is attributable mainly to location, the assembled workforce and the synergies expected to be achieved.
The fair values currently established for acquisitions made in the year to 28 February 2009 are provisional. Fair values will be reviewed based on
additional information up to one year from the date of acquisition. The Directors do not believe that any net adjustments resulting from such a review
would have a material effect on the Group.
Had all the combinations listed below taken place at the beginning of the financial year, with the exception of Dobbies Garden Centre PLC which
became a subsidiary in 2007/8, the operating profit of the Group would have been £3,391m and revenue would have been £55,750m. The pro-forma
information is provided for comparative purposes only and does not necessarily reflect the actual results that would have occurred, nor is it necessarily
indicative of future results of operations of the combined companies.
Tesco Personal Finance Group Limited (TPF)
On 19 December 2008, the Group acquired the remaining 50% of the share capital of its joint venture TPF, a provider of banking and other financial
services in the United Kingdom, making it a wholly-owned subsidiary undertaking.
The fair value of the identifiable assets and liabilities of TPF as at the date of acquisition were:
Pre-acquisition Recognised
carrying Fair value values on
amounts adjustments acquisition
£m £m £m
Property, plant and equipment 24 (3) 21
Intangible assets – 259 259
Loans and advances to banks and other financial assets 3 – 3
Loans and advances to customers 3,715 (347) 3,368
Other investments 259 – 259
Trade and other receivables 158 – 158
Deferred tax asset 12 40 52
Customer deposits (3,175) – (3,175)
Bank overdraft (92) – (92)
Borrowings (226) – (226)
Trade and other payables (177) (18) (195)
Net assets/(liabilities) 501 (69) 432
Fair value of acquired net assets of existing interest (216)
Net assets acquired 216
Goodwill arising on acquisition 767
983
Consideration:
Cash consideration 955
Costs associated with the acquisition 28
Total consideration 983
From the date of acquisition, the acquired business has contributed £163m to revenue and £34m of operating profit to the Group.